Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Yahoo! Inc. (YHOO), Staples, Inc. (SPLS), and AOL, Inc. (AOL) Among Activist Jeff Smith’s Worst Performing Picks in Q1

Jeffrey Smith’s Starboard Value LP had a solid first quarter, with its 16 long positions in stocks with a market cap above $1.0 billion delivering weighted average returns of 6.4% during this period. While most of its investments paid off, some of the hedge fund’s picks had a strong negative impact on overall returns. In this article we will take a closer look at Yahoo! Inc. (NASDAQ:YHOO), Staples, Inc. (NASDAQ:SPLS), Alibaba Group Holding Ltd (NYSE:BABA), and AOL, Inc. (NYSE:AOL), which were among Starboard Value’s worst picks in Q1.  Jeff Smith

Starboard Value is an activist hedge fund that was founded in 2002 by Jeffrey Smith. The firm employs a fundamental oriented approach and focuses primarily on small-cap stocks. Furthermore, the New York-based investment firm favors undervalued companies and seeks to actively engage with management in order to identify opportunities to unlock further shareholder value.

Yahoo! Inc. (NASDAQ:YHOO) was one of Starboard Value’s top picks at the start of the first quarter, with a holding of 7.72 million shares valued at around $390 million. The hedge fund entered a new position in the company during the third quarter of 2014. Mr. Smith’s firm hoped management would take steps to increase shareholder value by spinning off Yahoo! Inc. (NASDAQ:YHOO)’s stake in Yahoo! Japan and/or considering a merger with AOL, Inc. (NYSE:AOL). However, so far this year, Starboard Value was unable to profit from its stake in this stock, which lost 12.02% during the first quarter.

Staples, Inc. (NASDAQ:SPLS) also performed poorly last quarter, as shares dropped 9.45%. This was bad news for Starboard Value, as it had increased its stake in the company to 31.46 million shares in February. Hence, the hedge fund is currently one of Staples, Inc. (NASDAQ:SPLS)’s largest shareholders among institutional investors. Mr. Smith’s firm remains confident the stock will deliver solid returns in the future, especially once post-merger synergies from its acquisition of Office Depot Inc (NASDAQ:ODP) kick in. Richard S. Pzena’s Pzena Investment Management is also betting on the company, disclosing a position of 25.45 million shares in its latest 13F filing.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.